Below is the news update on the decision of the Frankfurt Higher Regional Court of December 1, 2020 (File no.: 21 W 137/20)
Corporate Law and Corona.
In a recent decision by the Frankfurt Higher Regional Court of December 1, 2020 (File no.: 21 W 137/20), the primary question concerned how the shareholder’s right of inspection into the business documents and commercial books of a GmbH, pursuant to Section 51a para. 1 of the GmbH Act, is structured during the Corona pandemic.
The Frankfurt Higher Regional Court rightly decided that during the Corona pandemic, the mere provision of documents for inspection in a 13 sqm business room, which, in addition to numerous boxes, also contains a desk, a computer table, and a couch with another table, with three people present in the room, does not fulfill the company’s obligation under Section 51a para. 1 of the GmbH Act. The court referred to the “Corona – Contact and Business Restriction Ordinance,” which stipulates that the recommendations of the Robert Koch Institute for hygiene must be observed during any gathering. According to the Frankfurt Higher Regional Court, the prescribed observance of a minimum distance of 1.5 m was not possible in the room provided.
As a precautionary measure, it should be noted that while this is an individual case decision, it cannot be ignored and provides a crucial basis for argumentation, especially during the Corona pandemic, if the company is able to impede the shareholder’s right of inspection by merely providing documents in numerous, unsorted, and stacked boxes, or if the right of inspection can only be exercised by compromising physical integrity.
The decision of the Frankfurt Higher Regional Court was preceded by the judicial decision on the right to information and inspection of the Frankfurt Regional Court of February 12, 2020 (File no.: 2-22 O 7/19) under Section 51b of the GmbH Act, according to which the defendant company was ordered to grant the plaintiff shareholder access to the complete commercial books and business documents of the company, including correspondence and booking receipts from the last 10 years, whereby the shareholder could avail herself of the assistance of lawyers subject to professional secrecy during the inspection and was allowed to make photocopies at her own discretion with her own means.
The decision of the Frankfurt Higher Regional Court therefore yields the following guiding principles for practical application:
1. Contrary to what the company often believes, it may also be obliged to support the shareholder from the perspective of proportionality, specifically if the inspection would otherwise not be possible or would be unduly difficult.
2. This leads, among other things, to the conclusion that, contrary to the general principle that inspections must take place on the company’s premises, the company may be obliged to provide suitable premises for inspection outside its business premises.
3. This applies all the more if the inspection could impair a constitutionally protected asset, such as physical integrity, even if providing suitable premises involves not entirely insignificant costs for the company (e.g., rental costs for the other premises; costs for transporting the documents to the other location).
The proceedings before the Frankfurt Regional Court and the Frankfurt Higher Regional Court were successfully handled by the lawyers of mainfort Rechtsanwaltsgesellschaft- und Steuerberatungsgesellschaft mbH.
Contact persons are Lawyer and Tax Advisor Dr. Andreas Striegel LL.M and Lawyer Heiner Neuhaus.
Signed A. Warto
Frankfurt am Main, January 7, 2022
